While I was a student at the CU MBA program, the Internet promised to fundamentally change the way businesses operated. From the fall of 1998 to when I graduated in June of 2000, we frequently had guest speakers that had started hot new companies and had personally cashed out for tens millions of dollars. So after trying to start a similar company with some business school colleagues, I joined a $47 million venture-backed startup.
Although sanity had returned to most of the business world, back at the startup the rules of the post-dot-com economy didn’t yet apply. But after a year and a half with the company (and with no products, customers or a viable business model), I left to start my own high-tech firm. I decided right away that I didn’t want to pursue venture capital. Nor did I want to pursue the latest and greatest bleeding-edge technology.
I instead focused on a current business need – communicating via personalized email with customers in a privacy-friendly way – that had thus far remained a complex and costly endeavor. I did my market research, and found that in just a few short years, more than 45% of all Americans had signed up for an email account, and 84% checked their email on a frequent basis. I also found out – by actually talking to potential customers – that most businesses and organizations weren’t using email as a way to interact and talk to their prospects and customers. Marketing managers were afraid of violating their customer’s privacy, and often didn’t know where to start with email.
After all, business schools tend to teach marketers how to work with an ad agency that will help them craft a message, and develop radio, print and television commercials – not how to do direct marketing on the web. Armed with market research and a desire to fill a real business need, I formed a company. I built a Web site, and licensed or built the required email marketing tools. And thanks to a down economy, contract programmers and commission-based sales people are much easier to find than they were just a couple of years ago, when companies begged people with minimal experience to work for highly inflated salaries. And also due to a down economy, businesses are aggressively looking for new ways to cut costs and increase the bottom line.
Our pitch frequently revolves around shifting a few budget dollars away from a traditional postal mail campaign, and using the money to instead communicate more frequently with their customer database. Through a lot of hard work, a great deal of networking and extremely targeted advertising campaigns, nine months later the company has a healthy client base, including several Fortune 500 companies. We won’t be posting multi-million dollar quarterly earnings any time soon; but then again, neither will many of the Internet startups I worked in and around in the past.
We take what we do seriously, but we’re not infected with a belief that we’re radically changing the world. We are a Boulder-based company, though, so we do like to think though that shifting to email helps save trees. ;-) The irony is that in a way, I do have the Venture Capitalists to thank: I carefully saved my money while I worked at the startup, and have leveraged those precious funds to create Customer Paradigm.